Bitcoin reached a new all-time high (ATH) yesterday, rising to $111,999 on the Binance exchange before slightly dropping to around $110,000 at the time of writing. Although the general trend remains bullish, some analysts are now predicting a short-term correction.

Bitcoin Is Still Bullish But Expected to Face Some Pullbacks

According to a recent post by contributor BorisVest on CryptoQuant Quicktake, early warning signs suggest that BTC may face a short correction. The analyst notes that if the upward momentum does not recover soon, Bitcoin might struggle to maintain its bullish trajectory.

The buy/sell volume of Binance Taker has shown a significant increase in strong buy orders – generally a bullish signal – but the sell volume has also increased, essentially absorbing most of the demand. Despite this increase in buying volume, BTC's price has not reacted accordingly, indicating distribution or selling pressure.

For those unfamiliar, the buy/sell volume of Binance Taker measures the level of strong buying/selling on the exchange using market orders. Higher Taker buy volume indicates strong interest from buyers, while higher Taker sell volume indicates stronger selling pressure.

Additionally, the open interest on Binance has surged during the recent rally, signaling an increase in leveraged positions. While the increase in open interest may support the next upward move, the weak price response raises concerns about Bitcoin's short-term strength.

Meanwhile, the funding rate has mostly remained neutral throughout the rally. However, the latest breakout towards a new ATH has caused BTC's funding rate to turn slightly positive, indicating a long-term bullish trend and renewed optimistic sentiment.

This breakout has also caused significant short liquidations, potentially leading to a short sell-off. Data from Coinglass shows that in the last 24 hours, $521 million in positions have been liquidated – of which $448 million were short positions.

The Market Needs to Rest Before Climbing Higher

In conclusion, a contributor from CryptoQuant notes that despite the emerging cautious signals, the overall bullish structure of Bitcoin remains intact. However, the market is currently witnessing initial signs of a potential short-term pullback, particularly due to the volatile nature of this move.

Other analysts share the same view on BTC. For example, cryptocurrency analyst Christian Chifoi argues that the current price action could be a deceptive move aimed at trapping optimistic traders – potentially pushing BTC down to $97,000 before the final rally begins.

However, the recent weakening of the US Dollar Index (DXY) has raised hopes for a reallocation of capital to alternative assets, including BTC. At the time of writing, BTC is trading at $110,885, up 1.1% in the last 24 hours. $BTC